A new Morningstar report shows that the wealth of U.S. investors is increasingly being managed by fewer fund families, with the top 25 fund families holding $15.7 trillion, or 82% of investors’ assets in U.S. funds. That’s up from 81% six months ago and 79% a year ago.
Every six months, Morningstar ranks the top 150 retail asset managers, based on quality of their fund lineups. The research company analyzes funds on a combination of data points, such as market share, flows and fees.
The firms at the top of the list tend to retain their spots from year to year, but those in the middle often move up and down in the list, Morningstar observes. Dodge & Cox, Baird, American Funds, PRIMECAP and Jensen landed in the top five, again.
But advisors and investors still need to do their own due diligence and look closely at firms at the top of the list; the environment can shift fast, says Bridget Hughes, director of parent research with Morningstar Research Services.
“In addition to the continued demand for passive funds, the SEC’s new Regulation Best Interest ruling has led distribution outlets to continue the work they started in order to prepare for the now-dead fiduciary rule; those efforts have tended to shrink the number of funds offered by broker/dealers. To be sure, no firm’s reign is permanent nor even entirely secure,” Hughes writes.
